THE MEDIA BUSINESS

THE MEDIA BUSINESS; Investor Settles Libel Suit Against Business Week

By PETER TRUELL

Published: December 18, 1997

Correction Appended

In a settlement, Julian H. Robertson, the Wall Street investor, withdrew a libel suit against Business Week yesterday.

The magazine, in turn, acknowledged in a statement, as it will in a coming issue, that predictions regarding the investment performance of Mr. Robertson's Tiger Management Corporation that appeared in an April 1996 article had proved inaccurate.

No money was paid as part of the settlement.

The Business Week article, ''The Fall of the Wizard of Wall Street,'' had maintained that Mr. Robertson's ''glory days are over'' after he chalked up lackluster results in 1994 and 1995. Since then, however, Mr. Robertson's Tiger fund reported gains of 48 percent in 1996 and 67 percent for 1997 as of Dec. 11. After allowing for Tiger's fees, the gains were 38.4 percent in 1996 and 53.7 percent so far in 1997.

Mr. Robertson, who has thus easily beaten market averages and most other investment managers, has particularly profited from his stock picking in the United States and from his bets that Japan and other Asian markets would decline.

Mr. Robertson's suit, filed in March in State Supreme Court in Manhattan, had sought $1 billion in libel damages from Business Week, a McGraw-Hill Companies publication.

Each side said yesterday that it was pleased with the agreement.

''We are delighted with this,'' Stephen B. Shepard, editor in chief of Business Week, said. ''He has withdrawn a billion-dollar lawsuit. There are only three points raised in this settlement, and one is an agreement to disagree.''

The three points, Mr. Shepard said, were, first, the acknowledgment that Business Week's predictions for Tiger were wrong; second, the acknowledgment that Mr. Robertson had not ''stopped meeting with corporate managements'' as the original article contended, and third, an agreement to disagree over an incident that Business Week maintained took place around the time of the market crash, but that Mr. Robertson denied ever happened.

''Why he sued in the first place, I don't know,'' Mr. Shepard said. He also noted that Business Week had subsequently reported Mr. Robertson's improving investment performance.

Mr. Robertson said yesterday that he too was pleased with the settlement, and added that ''the arrogance they showed in making completely untrue charges has been refuted.''

The joint statement released yesterday by the two sides, he said, ''gives people a chance to see all sides of this.'' The article clearly still seemed to rankle him, however. ''How dare they claim I never make company visits,'' he said. ''That's like telling a journalist that he doesn't interview people.''

The article, he said, had ''severely hurt'' his business, by dissuading investors from placing money with his funds, and by putting off talented graduates who might have wanted to join his company.

The money, however, has started to flow back: in the last 12 months, the funds have grown to about $16 billion from about $8 billion, according to Fraser C. Seitel, Mr. Robertson's spokesman.

John J. Walsh of Cadwalder, Wickersham & Taft, Mr. Robertson's lawyer in the case, said: ''I think that Mr. Robertson has certainly shown by the performance of the last two years that the principal thesis of the article was quite terribly wrong. Given the acknowledgment of his continued success by Business Week, it seems to be an appropriate ending to the situation.''

The two sides also seemed to disagree about the likely impact of the settlement for future libel cases.

''One of the risks of any billion-dollar lawsuit is that it will have the impact of chilling free speech in the future,'' said Floyd Abrams, the partner at Cahill Gordon & Reindel who represented Business Week. ''I don't think the settlement announced today will have that effect.''

Correction: January 7, 1998, Wednesday A subheading in Business Day on Dec. 18 with an article about the settlement of a libel suit brought against Business Week by Julian H. Robertson, the Wall Street investor, cited the agreement imprecisely. The magazine acknowledged that predictions about the investment performance of Mr. Robertson's company, in a 1996 article, had proved inaccurate, and that an assertion that Mr. Robertson had stopped meeting with corporate managements was incorrect. The magazine did not concede that the article itself was inaccurate.